Since the United States Supreme Court issued Obergefell in 2015, there have been dark predictions that religious freedom and other, more recently gained, civil rights protections are on a collision course. Recent developments might cause this course to run through the employment arena. In August, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a directive to “incorporate recent developments in the law regarding religion-exercising organizations and individuals.” Specifically, the Directive aims to update federal policy to align it with recent Executive Orders and Supreme Court decisions.

As examples of Supreme Court decisions that guide its purpose, the Directive cites to Masterpiece Cake Shop, Ltd. v. Colo. Civil Rights Comm’n, 138 S. Ct. 1719 (2018) (government violates Free Exercise clause when its decisions are based on hostility to religion or a religious viewpoint), Burwell v. Hobby Lobby, Inc., 134 S. Ct. 2751 (2014) (RFRA applies to closely held for-profit corporations which can object to certain legal requirements on religious grounds), and Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (2017) (government violates Free Exercise clause when it conditions the availability of a public benefit on a religious entity shedding its religious character). In addition, the Directive cites to Executive Orders 13831 and 13798, which proclaim the policy of the executive branch to enforce legal protections for religious freedom and to allow faith-based organizations an opportunity to compete for federal grants, contracts, programs and other funding opportunities.

These specific references have prompted some concern that the Directive might enable faith-based entities to discriminate under the guise of religious freedom. In particular, some LGBTQ advocacy groups have been quick to decry the Directive as a “license to discriminate.” Although the precise effect of the directive is yet unclear, it seems to be part of a larger effort to encourage faith-based organizations to compete for federal contracts.

Generally, OFCCP’s FAQs and Directives are guidance documents that do not have the same authority as Executive Orders or the regulations. The Directive states, however, that OFCCP may pursue regulatory modifications to implement the aforesaid developments. The Directive also states that it “supersedes” the FAQs regarding the religious freedom exemption to the extent they do not reflect those developments. This essentially modifies the FAQ guidance. Additionally, the Directive instructs the OFCCP staff to take these developments into consideration in their enforcement and other efforts.

Meanwhile, President Obama’s Executive Order, which extended nondiscrimination protections to sexual orientation and gender identity, remains intact and the EEOC has taken the position that Title VII offers protection on those bases. This past March, the Sixth Circuit endorsed that position by holding that termination of an employee on the basis of transitioning or transgender status violates Title VII. See EEOC v. R.G. &. G.R. Harris Funeral Homes, Inc., 884 F.3d 560 (6th Cir. 2018) On the other hand, President Trump’s Executive Orders, drawing on recent Supreme Court decisions, leave no doubt about his administration’s commitment to robust protections for religious freedom. These competing policies will inevitably intersect and occasion some clarification by the courts. Until that time, federal contractors should continue to comply with regulations that prohibit discrimination on the basis of sexual orientation or gender identity.

By Shaleem S. Yaqoob & Elizabeth Acee of LeClairRyan